Watch Now


Saia fourth-quarter EPS comes in light, operating income falls nearly 18%

Higher costs weighed in q4 (Photo: Jim Allen/FreightWaves)

Less-than-truckload (LTL) carrier Saia, Inc. (NASDAQ:SAIA) posted on Monday mixed fourth-quarter results, but analysts and investors chose to focus on more favorable news ahead for 2020, helping send shares up more than 8% by the close of trading.

The Johns Creek, Ga.-based company posted a near 9% increase in fourth quarter revenue, but operating income declined 17.7% due to the high costs of the company’s U.S. expansion, increased labor costs, a rise in depreciation and amortization expenses, and a spike in insurance claims due to several severe accidents.

Saia reported fourth-quarter earnings per share of 81 cents, 4 cents per share less than analysts’ consensus estimates. Revenue came in slightly higher than analysts’ estimates.

Saia opened 10 facilities during 2019–most of them in the Northeast as part of its three year program to penetrate the competitive region. Company executives said Monday that they plan to throttle back significantly on network expansion in 2020 in favor of deepening the integration of its Northeast region with the rest of its U.S. network.


In the quarter, operating income came in at $27.4 million. Shipments and tonnage rose 6.3% and 4.3%, respectively, year-over-year. Weight per shipment declined by 2%. Operating ratio, the ratio of expenses to revenues, was reported at 93.8%, a 200 basis point increase over the 2018 quarter as higher costs weighed. Revenue per shipment rose 1.8% to $238.45.

December tonnage gained 8% year-on-year, while January tonnage increased 9% from January 2019 levels, the company said.

For the year, revenue hit a record $1.8 billion, an 8% increase over 2018. Operating income was $152.6 million, an 8.1% increase. Daily volume rose 4.3%, but tonnage dipped 0.4%. Revenue per shipment rose 3.4%.

Todd Fowler, analyst for KeyBanc Capital Markets, said Saia’s current tonnage trends point to mid to high single-digit gains in the first half of 2020 based on historical sequential patterns and the maturation levels of the new facilities supporting its Northeast expansion, which launched in May 2017.


Saia CEO Rick O’Dell said in a statement that the expenses associated with the facility openings “were a drag in the back half of the year.” Saia has opened 18 terminals in the Northeast since the program launched in May 2017. The company is on a $280 million annualized revenue run rate in and out of the region, O’Dell said, a figure that analysts said translates to operating below break-even levels.

Saia’s President and Chief Operating Officer Fritz Holzgrefe added that the LTL pricing environment remains “rational” despite the ongoing sluggishness in industrial activity that has compressed the top-lines of all LTL carriers. Saia said contract renewal rates rose 5.4% in the fourth quarter of 2019, consistent with a 5.5% increase in the prior quarter.

Margins are expected to improve into 2020 as terminal expansion moderates and efficiency gains are realized, Fowler said. The analyst lowered his full-year EPS estimates to $5.00 from $5.10 to reflect modestly higher costs. The firm has an “overweight” rating on the shares with a $100 price target.

Saia shares closed at $94.57, up $7.47 a share on the day.

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.